MANAMA: Non-resident Indians in Bahrain were last night urged to invest in gold, UK sterling or Euro to offset the losses they have suffered due to the weakening dollar. The call came from Reserve Bank of India director and finance/tax expert Homi Ranina, who said Indians in Bahrain, where the dinar is pegged to dollar, should consider various options to protect their income.
"It is ideal to put their money in a basket of currencies, preferably UK sterling and euro, against which the Indian rupee is weakening," he told the GDN.
"It is also ideal to invest in gold, which will continue appreciating in value in the coming years.
"I shall not advise Indians to invest in their country's stock market now."
The Indian stock market witnessed a huge inflow of $45 billion during August-November last year, said Mr Ranina.
"When this money is pulled out, the market will weaken, and I shall not advise people to invest in the stock market now though the prices are down," he added.
However, on the future of the Indian economy, Mr Ranina was very optimistic.
"It has been officially announced that our economic growth last year was 8.7 per cent," he said.
"With infrastructure coming into place, including new highways, airports, seaports and power plants, our growth figures are expected to reach 11pc by 2013."
Mr Ranina was the keynote speaker at a seminar organised by the Lions Club of Bahrain at the Bahrain Society of Engineers Hall in Juffair last night.
He spoke on the subject of "Current Economic Scenario - impact of the appreciating Rupee on the NRI investor".
He praised the salient features of the Indian budget presented by Finance Minister P Chidambaram last week.
"We have now the lowest rate of income tax in the history of India," said Mr Ranina.
"For the fiscal year 2008-09, a male, female and a senior citizen having an income of Rs 500,000 per annum will save tax of Rs 44,000, Rs 43,500 and Rs 38,500 respectively, compared to the current year."
The new budget is a growth-oriented one as additional after-tax income will be left in the hands of millions of taxpayers who will be inclined to spend more money, said Mr Ranina.
"There are a large number of young consumers which will enable India to secure the benefit of a rich demographic dividend," he added.
The deepening of the capital market, including the debt market, will result in more investments in the corporate sector, said Mr Ranina.
"It is expected that foreign direct investment will flow in greater measure during the fiscal year 2008-09, despite global economic slowdown," he added.
"The availability of more skilled and technically qualified professionals in the coming years, as a result of greater emphasis on higher education, will provide the information technology sector with adequate human resources to continue with their growth story.
"India is undoubtedly considered to be one of the top five investment destinations in the world.
"This year's budget proposals will ensure that India's place as an economic superpower remains firmly entrenched in the global environment."
Indian Ambassador Balkrishna Shetty was the chief guest at the seminar. Lions Club of Bahrain president V Kamboj chaired the meeting, and event chairman Percy Mistry proposed a vote of thanks.
soman@gdn.com.bh
